Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income tax expense (benefit) attributable to continuing operations

Income tax expense attributable to continuing operations for each of the years in the three-year period ended December 31, 2024 is as follows (in thousands):


	2024		2023		2022
Current tax expense :
Federal	$	110,464	$	67,711	$	104,141
State	15,040		11,775		12,870
Total current tax expense	125,504		79,486		117,011
Deferred tax expense (benefit):
Federal	(19,550)		67,446		15,082
State	199		4,922		4,658

Total deferred tax (benefit) expense	(19,351)		72,368		19,740
Total income tax expense	$	106,153	$	151,854	$	136,751

Income tax rate reconciliation

Pinnacle Financial's income tax expense differs from the amounts computed by applying the Federal income tax statutory rate of 21% to income before income taxes. A reconciliation of the differences for each of the years in the three-year period ended December 31, 2024 is as follows (in thousands):


	2024		2023		2022
Income tax expense at statutory rate	$	122,054	$	149,941	$	146,474
State excise tax expense, net of federal tax effect	12,039		13,191		13,847
Non-deductible executive compensation	5,635		5,186		5,481
Tax-exempt securities	(22,169)		(21,663)		(18,730)
Federal tax credits	(8,170)		(5,238)		(5,019)
Bank owned life insurance income	(8,780)		(4,324)		(4,599)
Bank owned life insurance surrender	—		8,572		—
Non-deductible FDIC assessment	7,103		5,361		2,331
Insurance premiums	—		—		(36)

Excess tax benefits associated with equity compensation	(2,806)		(208)		(3,027)

Other items	1,247		1,036		29
Income tax expense	$	106,153	$	151,854	$	136,751

Components of deferred income taxes included in other assets

The components of deferred income taxes included in other assets in the accompanying consolidated balance sheets at December 31, 2024 and 2023 are as follows (in thousands):


	2024		2023
Deferred tax assets:
Allowance for credit losses	$	99,002	$	86,911
Loans	4,463		4,659
Insurance	878		784
Accrued liability for supplemental retirement agreements	6,611		7,005
Restricted stock and stock options	8,255		6,251
Securities	44,504		49,331
Cash flow hedge	8,772		—
FHLB related assets	64		—

Lease liability	76,426		76,918
Other real estate owned	—		750
Net federal operating loss carryforward and credits	9,621		1,064
Annual incentive compensation	20,473		11,842
Partnership interests	33,747		13,541
Allowance for off balance sheet credit exposures	3,117		4,367
Tax credit investments	2,601		—
FDIC special assessment	6,254		7,250
Accrued expenses	1,465		844
Other deferred tax assets	2,426		1,688
Total deferred tax assets	328,679		273,205

Deferred tax liabilities:
Depreciation and amortization	20,438		23,140
Core deposit and other intangible assets	5,193		6,087

Cash flow hedge	—		836
REIT dividends	2,247		2,604
Mortgage servicing rights	2,963		—
FHLB related liabilities	—		125
Equity method investment	18		42
Right-of-use assets and other leasing transactions	72,886		74,068
Leases	83,810		67,711
Subordinated debt	1,293		1,412

Tax credit investments	—		7,614
Prepaids	1,611		273
Other deferred tax liabilities	2,748		2,083
Total deferred tax liabilities	193,207		185,995
Net deferred tax assets	$	135,472	$	87,210

Rollforward of uncertain tax positions

A reconciliation of the beginning and ending unrecognized tax benefit related to state uncertain tax positions for each of the years in the three-year period ended December 31, 2024 is as follows (in thousands):


	2024		2023		2022
Balance at January 1,	$	8,806	$	15,752	$	12,737
Increases due to tax positions taken during the current year	140		642		3,721
Increases due to tax positions taken during a prior year	3,831		—		—
Decreases due to the lapse of the statute of limitations during the current year	(1,750)		(1,340)		(706)
Decreases due to settlements with the taxing authorities during the current year	(900)		(6,248)		—
Balance at December 31,	$	10,127	$	8,806	$	15,752